Minework­ers fund takes 13 years to pay fam­ily of a worker

Pen­sion funds ad­ju­di­ca­tor Mu­vhango Lukhaimane has lashed out at the Minework­ers Prov­i­dent Fund for sit­ting on a de­ceased fund mem­ber’s sav­ings for al­most 13 years while his life part­ner and child had to make do with­out any pay-outs from the fund. When con­tacted by the part­ner of the de­ceased, the fund hid be­hind pre­scrip­tion as a de­fence. Pre­scrip­tion is when a debt or obli­ga­tion is ex­tin­guished after a pe­riod of time. Lukhaimane was scathing about this in her 2017/18 an­nual re­port, call­ing the fund “dis­hon­est and disin­gen­u­ous” for rais­ing pre­scrip­tion on un­claimed ben­e­fits.

It is the re­spon­si­bil­ity of the board of trustees of your pen­sion fund to iden­tify and find your ben­e­fi­cia­ries when you die, and they must do so within a rea­son­able time frame. Fail­ure to do this has con­trib­uted to bil­lions of rand in un­claimed ben­e­fits, with the pen­sion funds ad­ju­di­ca­tor blam­ing it on a lack of skills and funds drag­ging their feet. The man, who died on July 31 2004, worked for one of the big gold min­ing com­pa­nies and was a mem­ber of the Minework­ers Prov­i­dent Fund. By Fe­bru­ary 2017, his full ben­e­fit of R596 541 was still un­claimed, even though he had ben­e­fi­cia­ries – at least his own child.

The Pen­sion Funds Ad­ju­di­ca­tor or­dered the fund to pay the ben­e­fit plus a 10% fine for “com­pen­satory dam­ages” with­out de­lay after re­ceiv­ing a com­plaint from the man’s life part­ner that she needed ac­cess to the funds for the child’s main­te­nance. Lukhaimane told Money that long de­lays can only be jus­ti­fied in as lit­tle as 5% of all com­plaints brought be­fore her of­fice. “We of­ten find that where there has been a de­lay, it can only be jus­ti­fied in about 5% of the cases; the rest is just funds tak­ing their time.” In terms of sec­tion 37C of the Pen­sion Funds Act which reg­u­lates the pay­ments of death ben­e­fits, the board of trustees must:

Iden­tify de­pen­dents and

● those the de­ceased mem­ber has nomin ated to re­ceive the ben­e­fits; Make the ben­e­fit al­lo­ca­tions

● on an eq­ui­table ba­sis; and De­ter­mine an ap­pro­pri­ate

● mode of pay­ment of the death ben­e­fit.

The act also obliges trustees to find ben­e­fi­cia­ries within 12 months. If they find them sooner, they should pay out as quickly as pos­si­ble. Sec­tion 37C iden­ti­fies three types of de­pen­dents:

Le­gal de­pen­dents – there is a ● le­gal duty to sup­port such a per­son (spouse, chil­dren);

Fac­tual de­pen­dents – where ● the de­ceased had no le­gal obli­ga­tion to sup­port these peo­ple but did so any­way;

Fu­ture de­pen­dents – per­sons

● where if the de­ceased did not die, would have been sup­ported (a fi­ancée or el­derly par­ents). In this case, it be­came clear that the fund took way too long to con­duct its in­ves­ti­ga­tion, and when con­tacted by the part­ner of the de­ceased, it used pre­scrip­tion to jus­tify its fail­ure to pay out. Lukhaimane said rea­sons for the in­crease in un­claimed ben­e­fits in­clude lack of ex­per­tise to iden­tify ben­e­fi­cia­ries and in­valid or in­com­plete data main­tained by funds and their ad­min­is­tra­tors. “These is­sues should un­der no cir­cum­stances be vis­ited on the right­ful claimants,” she said. She said with the greater reg­u­la­tory over­sight of the Fi­nan­cial Ser­vices Con­duct Au­thor­ity (FSCA), “the bad ap­ples should be easy to weed out” to fur­ther pro­tect con­sumers.

/ NA­DINE HUT­TON/BLOOMBERG VIA GETTY IM­AGES

Mine work is hard and dan­ger­ous. A miner's sav­ings in a pen­sion fund can pro­vide for their fam­i­lies in the event of their death be­fore re­tire­ment.

Comments

Francisca Butler - 2018-12-12

Wow....Im so grateful and thankful that I read this page/article as my case is being finalised(I hope) by the PFA.....i felt that there was no-one to turn too ... prior to reading this article,I felt so depressed,crying all the time as I know I have been wronged by the Pssf Provident Fund....I see that this office is looking after the Beneficiaries,especially as it's extremely hard and difficult in all spheres of life,financial emotional etc....especially when the deceased was the bread-winner....Thank you.